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Year Property Class Quiz

All of the following influence capital budgeting cash flows EXCEPT:

In proper capital budgeting analysis we evaluate incremental

The estimated benefits from a project are expressed as cash flows instead of income flows because:

In estimating "after-tax incremental operating cash flows" for a project, you should include all of the following EXCEPT:

A capital investment is one that

Taxing authorities allow the fully installed cost of an asset to be written off for tax purposes. This amount is called the asset's

Adam Smith is considering automating his pin factory with the purchase of a $475,000 machine. Shipping and installation would cost $5,000. Smith has calculated that automation would result in savings of $45,000 a year due to reduced scrap and $65,000 a year due to reduced labor costs. The machine has a useful life of 4 years and falls in the 3-year property class for MACRS depreciation purposes. The estimated final salvage value of the machine is $120,000. The firm's marginal tax rate is 34 perc

(See information in Question #7 above.) The "cost" of this asset that, by law, may be written off over time "for tax purposes" is closest to

In general, if a depreciable asset used in business is sold for more than its depreciated (tax) book value, any amount realized in excess of book value but less than the asset's depreciable basis is considered a

Under the Modified Accelerated Cost Recovery System (MACRS), an asset in the "5-year property class" would typically be depreciated over years.